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FRANCE - Alstom's board backs bid from General Electric [FRANCE 24]

(FRANCE 24 Via Acquire Media NewsEdge) Alstom on Saturday said its board had given the green light to a proposed tie-up with General Electric in which the US conglomerate will pay 12.35 billion euros for the French group's energy business.

"The board of directors unanimously decided to issue a favourable opinion of GE's offer" and will begin consultations with personnel, a statement said, adding that if shareholders and workers' representatives approve, the deal will close sometime next year.

The statement comes a day after the French government stepped firmly into the battle over Alstom, saying it favoured General Electric's offer over a joint rival bid from Siemens and Mitsubishi Heavy Industries. The government also announced a surprise caveat that it would take a 20 percent controlling stake to preserve French strategic interests in its industrial jewel.

Two sources cited by Reuters said that an accord is taking shape on the price at which the government will acquire the stake from the current holder, French conglomerate Bouygues. An agreement is expected to be finalised on Sunday.

Alstom said the GE deal "not only addresses the interests of Alstom and of its stakeholders but also provides assurances in connection with concerns expressed by the French state".

President François Hollande earlier raised the pressure on Paris-based Bouygues, warning that failure to agree a price for the stake purchase could still scupper the tie-up.

"If this sale did not go ahead at a price acceptable to the government, it would be necessary to reconsider the alliance as it has just been announced," Hollande told reporters in Paris.

A politicised deal
The government's Friday announcement that it preferred GE's offer drew a line under a two-month battle for Alstom that had become heavily politicised as soon as the first reports of an agreed tie-up with GE appeared in April.

Although Alstom has favored a tie-up with GE since the beginning, it had to postpone signing any deal while the government intervened to seek assurances on jobs and decision-making.

The GE-Alstom deal announcement followed two days of intensive talks with Alstom Chief Executive Patrick Kron, GE boss Jeff Immelt and their Siemens and Mitsubishi counterparts.

Under the deal with GE, the US group would acquire most of Alstom's energy business, including gas and steam turbines for power plants, while handing over its own rail signalling division to reinforce the TGV train manufacturer's transport offering.

The tie-up also establishes three GE-controlled joint ventures in France to house Alstom's power grid, renewable energy and strategically sensitive nuclear turbine businesses.